OMB Guidance Expected on Measuring Insourcing, Outsourcing Costs

March 29, 2012

The Office of Management and Budget is expected to soon release guidance on how agencies should compare the cost of using federal workers against the cost of hiring contractors for certain work, Senate Contracting Oversight Subcommittee Chairwoman Claire McCaskill said Thursday.

"For too many years now, the federal government has relied on assumptions and flawed studies to support those assumptions. Without good data about the costs of using contractors instead of federal employees, the government simply doesn't have the information it needs to make smart choices," McCaskill said at a hearing looking at contracting costs and the data agencies use to analyze those costs.

"Assumptions are especially costly in our current budget climate and could undermine efforts to save taxpayer dollars."

Numerous studies have been done to account for the costs of federal and contract employees, McCaskill said. But they all reach different conclusions because they use different assumptions when calculating benefits, overhead and salary, she said.